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FSE is co-sponsoring a special event headed by the ASSU Food Cabinet at Stanford University. All questions about the event should be directed to Isabella Akker (aiakker@stanford.edu). 

Humanities Center
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Anuradha Mittal Executive Director Speaker <a href= "http://media.oaklandinstitute.org/"> Oakland Institute</a>
Frederic Mousseau Policy Director Speaker <a href= "http://media.oaklandinstitute.org/"> Oakland Institute</a>
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Indonesia is strategically positioning itself to play an even greater role in global economics and politics, particularly by promoting its stable political system and the opportunities for foreign investment there. Southeast Asia Forum director Donald K. Emmerson spoke recently with the Straits Times about the Indonesian government's strategy and about the global conditions favoring the country's growth.
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Edmund J. Malesky will argue that openness to foreign investment can have differential effects on corruption, even within the same country and under the same domestic institutions over time. Rather than interpreting bribes solely as a coercive “tax” imposed on business activities, he allows for the possibility that firms may themselves be complicit in using bribes to enter protected sectors or gain access to lucrative procurement contracts.  The propensity to bribe across sectors should vary with expected profitability related to investment restrictions. Thus, the linkage of foreign investment to corruption should increase dramatically as firms seek to enter restricted and uncompetitive sectors that offer higher rents. Malesky demonstrates this effect using a nationally representative survey of 10,000 foreign and domestic businesses in Vietnam. He also shows how the impact of domestic reforms and economic openness is affected by policies that restrict competition by limiting entry into a given sector.

Edmund Malesky is an associate professor of political science at the Graduate School of International Relations and Pacific Studies at the University of California, San Diego. He has published in leading political science and economic journals, including the American Political Science Review and the Journal of Politics, and has been awarded the Harvard Academy Fellowship and Gabriel Almond Award for best dissertation in comparative politics. Malesky serves as the lead researcher for the Vietnam Provincial Competitiveness Index and Cambodian Business Environment Scorecard.

For more information please see the event web page.

Graham Stuart Lounge

Edmund J. Malesky Associate Professor, Graduate School of International Relations and Pacific Studies Speaker the University of California, San Diego
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**Due to space restrictions, this event has reached capacity and we will no longer be taking RSVPs. Please plan to arrive early as seating is on a first come, first serve basis.**

Since 2008 China's banks have made loans that approach 30% of GDP each year. The central bank has used a broader measure of credit, total societal financing, that suggests credit extended in 2011 may exceed 40% of the country's GDP. It is inevitable that such profligate lending will result in significant amounts of problem loans.  The international market is well aware of this and Chinese bank shares have been hit hard for most of this year. How will these bad loans be managed? More importantly, why has the government once again used China's ostensibly commercial banks as if they were policy banks and what are the implications of this for China's economy going forward?

Carl E. Walter worked in China and its financial sector for the past 20 years and actively participated in many of the country’s financial reform efforts. While at Credit Suisse First Boston he played a major role in China’s groundbreaking first overseas IPO in 1992, as well as the first primary listing of a state-owned enterprise on the New York Stock Exchange in 1994. He was a member of senior management at China International Capital Corporation, China’s first and most successful joint venture investment bank where he supported a number of significant domestic and international stock and bond underwritings for major Chinese corporations. More recently at JPMorgan he was China Chief Operating Officer and Chief Executive Officer of its banking subsidiary. During this time Carl helped build a pioneering domestic security, risk and currency trading operation.

A long time resident of Beijing before his recent return to the United States, Carl is fluent in Mandarin and holds a PhD from Stanford University and a graduate certificate from Peking University. He is the co-author of Red Capitalism: the fragile financial foundations of China’s extraordinary rise as well as Privatizing China: inside China’s stock markets

This event is part of the China's Looming Challenges series

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Carl Walter Former CEO Speaker JPMorgan Chase Bank China Co Ltd.
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This paper was prepared for Stanford University’s Global Food Policy and Food Security Symposium Series, hosted by the Center on Food Security and the Environment, and supported by the Bill and Melinda Gates Foundation.


Relative to other regions of the world, most African economies are still heavily reliant on agriculture as a source of income and employment. And with more than 70 percent of the continent’s poor residing in rural areas, the production and productivity performance of African agriculture is pivotal to overall economic growth and the well-being of the poorest people in the region. After a dismal decade of output growth in the 1970s, the rate of aggregate agricultural output growth picked up for each of the subsequent three decades, and averaged 2.83 percent per year during the 2000s. With population growing at still record rates by world standards, per capita output grew much more slowly, just 0.36 percent per year during the past decade. 

The productivity evidence is mixed and difficult to summarize. The rate of African crop yield growth (at least for the four crops given closer attention in this paper: corn, wheat, rice and soybean) is generally slower than elsewhere in the world, and in keeping with patterns seen elsewhere there has been a slowdown in the pace of average crop yield growth in Africa since around 1990. African land and labor productivity levels also generally lag those found elsewhere in the world, although aggregate land productivity in Africa outperformed that of Australia and New Zealand, another region of the world with challenging agricultural soils and heavy reliance on erratic (and often agriculturally marginal) weather. The reported rates of growth in multi-factor productivity (MFP) for African agriculture are also low by world standards, but the body of available evidence suggests that African MFP growth rates picked up in recent years. Unfortunately, the lack of reliable data and differences in the analytical details between the available studies makes it hard to reconcile the evidence and reach robust conclusions about MFP performance throughout sub-Saharan Africa.

Productivity levels and growth rates are affected by a host of factors, not least the technologies linking inputs to outputs and, by implication, the amount, nature and effectiveness of the innovative effort that develops and deploys these technologies. Although overall investments in African public agricultural research and development (R&D) have increased during the past decade or so, the growth in spending is not especially widespread and dominated by growth in just a few countries. Nigeria and Ethiopia account for half the region’s increase in agricultural R&D spending from 2000-2005—the latest year for which data are presently available. The intensity of public investment (i.e., agricultural R&D spending relative to the value of agricultural output) has increased as well. However, during the 2000-2005 period Africa spent just $0.54 on public research for every $100 of agricultural output, almost half the corresponding rest-of-world intensity ($1.05) and one-fifth of the rich country average ($2.70). Fragmented and typically small research agencies, and unstable funding streams still bedevil African agricultural research endeavors and undermine efficiencies in agricultural research that are intrinsically long-term in nature. Turning around these research realties in a meaningful and sustained fashion will be critical to realizing the long-term growth in African agriculture productivity that will be required to grow that sector in particular and the region’s economies more generally.


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High School students in Palo Alto, Calif., spend more time using digital media daily than their counterparts in Beijing, but the Chinese youths are more likely to build networks online only according to a new study from Stanford University.

STANFORD GRADUATE SCHOOL OF BUSINESS — Who is more digitally switched on – high school students in Silicon Valley or Beijing?

A new study from Stanford University provides some clues. High schoolers in Palo Alto, Calif., in the heart of Silicon Valley, spend significantly more time using digital media every day than their peers at leading high schools in the Chinese capital. However, Chinese students sometimes outpace their American counterparts in embracing the latest internet technologies and building a network of online friends they have never met in person.

The Stanford Program on Regions of Innovation and Entrepreneurship (SPRIE), part of the university's Graduate School of Business, looked into the digital lives of teens in Silicon Valley and China's capital. Seventy-one high schoolers, 44 from Palo Alto and 27 from Beijing, were surveyed online earlier this month. The students, between the ages of 16 and 18, were asked about their usage of different types of consumer electronics and communications, including how much time they spent daily on a range of online activities.

While the California teens spent significantly more time than their Beijing peers using social networking sites and blogging, Beijing students spent considerably more time watching films and videos over the internet, hardly watching television at all. The Beijing teens were much more likely to have online-only friends, and more of them (44% versus 16%) touted Apple's iPad tablets than the Palo Alto respondents.

The study suggested the emergence of a "digital tribe" of teens transcending cultures and geographic borders, especially in tech hotspots such as Silicon Valley and Beijing. "In certain urban locations, today's teens are native 'netizens'," said Marguerite Gong Hancock, associate director of SPRIE. "Most teens in our survey in both Palo Alto and Beijing have had mobile phones since the age of 12. They lead a large part of their daily lives online."

The survey and other research into patterns of entrepreneurship and venture capital investment was discussed September 30 at a Stanford conference addressing the rise of the internet in China. The gathering, China 2.0: Transforming Media and Commerce organized by SPRIE, included speakers from leading internet companies in China, entrepreneurs, and venture capital investors.

In advance of the conference, SPRIE polled the high school students with the assistance of Beijing-based Danwei.org, a Beijing research and information firm. Most of the American teens attend Palo Alto High School, while most of the Beijing students go to People's University Annex High School. Forty-one females and 30 males participated.

SPRIE researchers wanted to get a snapshot of the digital lifestyle of young urban Chinese expected to shape China's technology future. "These are the influencers and early adopters," said Hancock.

China's internet population of about 485 million has already surpassed the approximately 250 million users in the United States. "Understanding the habits of the next generation of Chinese netizens is increasingly important to investors and new media companies. The 'born after 1990' generation in China will play a role in influencing global adoption of new technologies and business models" said Duncan Clark, chairman of consulting firm BDA China, and senior advisor of the China 2.0 project at SPRIE.

There were major similarities between Palo Alto and Beijing students. On weekdays, the top online activity for both was doing schoolwork, followed by using social networking sites and downloading and listening to music. On weekends among the Beijing students, schoolwork remained the leading activity, followed by social networking and web surfing. On weekends in Silicon Valley, students spent the most time on social networking sites, followed by schoolwork and music. In both countries, the teens overwhelmingly favored texting to communicate with friends, although the Beijing teens were less likely to text their parents than the Palo Alto group.

Overall, the U.S. teens spent significantly more time than their Chinese counterparts on almost all types of internet activities. The Palo Alto students spent roughly twice as long (two hours a day) on social networking sites. By contrast, the Beijing teens were much more likely to watch videos and films online.

The study suggested that teens in China rely more heavily on the internet as an emotional and social outlet. In Beijing, more than 90% of respondents said they have friends they know only over the internet. That compared with 29% in Palo Alto. "China's post-'90s single-child generation faces limited play time and heavy academic pressures. The internet enables teens to live out a whole other life online," said Clark.

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Jack Ma, chairman of China's Alibaba internet giant, told a Stanford audience his firm is "very interested" in acquiring Yahoo. Ma was one of the speakers at the "China 2.0" conference organized by the Stanford Program on Regions of Innovation and Entrepreneurship on Sept. 30.

STANFORD GRADUATE SCHOOL OF BUSINESS – In a wide-ranging talk, Jack Ma, chairman of China's Alibaba Group, publicly declared his interest in acquiring troubled U.S. internet giant Yahoo, while also reflecting on his 12-year journey building an internet powerhouse that has transformed commerce for small businesses and consumers in China.

The Chinese e-commerce billionaire addressed a Sept. 30 conference at the Stanford Graduate School of Business on the rise of China's internet. The gathering, China 2.0: Transforming Media and Commerce was organized by the Stanford Program on Regions of Innovation and Entrepreneurship (SPRIE). With more than 600 registered participants, the event featured talks by leading Chinese internet entrepreneurs and venture capitalists active in Asia as well as a look at ongoing Stanford research on venture investment patterns and networks in China.

Speaking without prepared notes, Ma revealed that he plans to spend the coming year in the United States. "After 12 years, I need some time to rest. This year has been so difficult for me. I'm now coming out for a year," said the Alibaba chief, whose company is based in Hangzhou, China.

Ma was asked if he wanted to acquire Yahoo, the struggling U.S. internet pioneer that owns 40% of Alibaba. "Yes. We're very interested in that. We're very interested in Yahoo because our Alibaba Group is so important to Yahoo and Yahoo is important to us. We are interested in the whole piece of Yahoo," he said, adding that Alibaba also has talked with other prospective buyers. However, a deal would be very "complicated," Ma cautioned. "I cross my fingers and say that we are very, very interested in that."

Alibaba's takeover of Yahoo would represent something of a role reversal, symbolizing how much China's internet—and to some degree, its economy—has eclipsed that of the United States'. In 2005, Ma sold a 40% stake in the fledgling Alibaba to Yahoo in exchange for $1 billion and control of Yahoo China. The Alibaba-Yahoo relationship has been strained in recent years and Ma has telegraphed his desire to reduce or buy back Yahoo's stake. "We appreciate yesterday, but are looking for a better tomorrow," Ma told the Stanford audience.

He described Jerry Yang, co-founder and board member of Yahoo, as "a good personal friend." Ma added, "Without the Yahoo investment, we wouldn't be that successful today. Yahoo is one of three companies that woke me up to the internet. Without the internet, there would be no Alibaba and no Jack Ma."

Ma downplayed recent investor concerns that Chinese regulators will clamp down on the "variable interest entity" (VIE), a vehicle that has allowed foreigners to indirectly invest in Chinese internet companies and for those firms to go public in overseas stock markets. "The VIE is a great innovation," but "we've got to make the VIE really transparent," said Ma. "I don't see that the government is going to shut it down," he added.

Ma reflected on some of his successes and failures since founding Alibaba in 1999 as an online venue for small Chinese firms to connect with overseas buyers. Visiting Silicon Valley that year, "I was rejected by so many venture capitalists. [But] I went back to China with the American Dream," he recalled.

Today, the Alibaba Group, with 23,000 employees, dominates e-commerce in China, largely through its Hong Kong-listed Alibaba.com business-to-business site, Taobao consumer-to-consumer marketplace, and Taobao Mall, a business-to-consumer site for branded items. Ma said his e-commerce enterprises have helped China's small businesses succeed and made Chinese consumers smarter about purchase decisions. "We feel proud because we're changing China," he said.

The conference took place shortly after Beijing announced that China's internet population has surpassed 500 million—about double the number in the United States. Two of the five biggest internet firms in the world, by market value, are from China. U.S. pioneers, including Yahoo, eBay, Google, and Facebook, have failed to make significant inroads in China, where the government exercises strong control over the internet and foreign ownership. In contrast, Chinese internet firms have grown rapidly, coming up with technological and business innovations for their domestic market, and seeking investors, technical know-how, and talent overseas.

"They are growing very quickly and have global aspirations. The days of thinking that's just an eBay copy is an old mindset," said Marguerite Gong Hancock, associate director of SPRIE. "The arrows are now pointing in both directions."

In a brief appearance, Stanford President John Hennessy told the audience that China and the internet "are the two most exciting things happening in the world." There are more than 1,000 students from China at Stanford, by far the largest from a single foreign country, he added.

Conference-goers heard from Joe Chen, MBA '99, founder and chief executive of Renren Inc., a social networking site popular among Chinese university students. Discussing the emergence of the social web in China, he described his company as positioned on the "bleeding edge of SoLoMo," describing the intersection of social, local, and mobile technologies coined by venture capitalist John Doerr. Chen suggested that social networking (based on relationships) has emerged as an alternative to online search (based on keywords) for obtaining and sharing information. Social networking will transform commerce, entertainment, content distribution, and communications, just as online search did, he predicted.

China's social networking and media companies have developed their own innovations, sometimes ahead of U.S. companies, said Chen.The world's first social networking farming game, for instance, was launched on Renren in 2008. Renren went public on the New York Stock Exchange in May, beating Facebook to the IPO trough.

Conference organizers described SPRIE research into venture capital investments and networks in China. Researchers analyzed data on more than 2,000 Chinese companies, nearly 800 investment firms, and more than 600 individuals, including their university and company affiliations. Using the data, they created visualizations—circular nodes with lines extending out in a web—of the relationships among companies, investors, and entrepreneurs. "This is the power of network analysis," said Hancock, showing onscreen a moving image of how China's "investment constellation" changed from 1996 to 2011. The densest venture clusters are in Beijing, Shanghai, and Shenzhen. The research identified more than 40 venture capitalists involved in China who have ties to Stanford, she said.

Venture capitalists discussed the landscape for funding internet startups that are proliferating in China. "Early stage is still quite bubblish," said Tim Chang, MBA '01, managing director of the Mayfield Fund. "There's a lot of hot money doing drive-by due diligence."

Entrepreneurs described a frenetic, hyper-competitive environment for startups. "It's brutal. There are periods I cannot sleep for a month because of the massive pressures," said Fritz Demopoulos, co-founder of Qunar.com, China's largest travel web site, which recently sold a majority stake to Chinese search giant Baidu. But "there's still so much room to grow," said Demopoulos. "The runway in China is long."

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Robin Niblett, Director of Chatham House, delivered the following talk in The Europe Center series “The European and Global Economic Crisis”.

With measured optimism about the prospect for a way out of the current Eurozone crisis, Dr. Niblett argues that the introduction of the common Euro, seen by many in past years as a vanguard tool for European integration, is now potentially a functional wedge between ‘debtor’ and strongly capitalized nations.  

Dr. Niblett, arriving directly from participating in the World Economic Forum in Dubai, and based on Chatham House research, described the “perfect storm” of the past two decades of credit-driven growth, divergence within the EU, rising debt-to GDP ratios of member nations especially in the cases of Italy and Greece.  His analysis combines these economic details with the following:

  • Demographics – high levels of unassimilated immigrants
  • European welfare economies still distributing resources at twentieth-century levels now in the twenty-first century
  • The rise of anti-immigrant and anti-free-trade populist parties
  • The weakening of Europe’s center parties
  • The “Russification” of Europe’s East – especially in recent events in Ukraine
  • The stalled integration of Turkey into the EU

The totality of the above paints a grim portrait of Europe under the weight of nearly impossible conditions.   And yet, Dr. Niblett underlines evidence for measured optimism:

  • Ireland is making strides to reform its economy
  • Ireland’s educated and yet unemployed workforce does have the possibility to immigrate to Europe
  • The UK is finally rebalancing its state budget and market liberalization
  • France is facing, albeit with massive labor protest, its state budget levels
  • Spain will likely turn over its government in the face of its massive youth protest
  • Italy is evaluating in its political process a series of budget reforms

These are the structural side of what Dr. Niblett sees as Europe’s tools for recovery.

On the side of European practice, the Franco-German proposals for European Central Bank “bailout funds” include new rules for transparency of internal government operations. This promises innovation to make the EU into an area of political and financial transparency, and to enable the EU to engage in direct investment, as evidence is beginning to show, in the world’s emerging economies.  In this sense, Dr. Niblett sees for Europe a competitive edge over the US in engaging in world markets.

Perhaps most sanguine of Dr. Niblett’s analysis is his reading of the Eurozone crisis as a force to push the member nations of Europe further towards supra-national economic strategies.  In order to participate in the investment in emerging markets, the Benelux countries, not to mention France, Germany, and neighboring European states, are responding to the crisis by considering policy that promotes investment and outsourcing for service-sector employment, instead of export commodities which have been undercut in recent years.

There is a risk, in Dr. Niblett’s view, that Europe will respond to the Eurozone crisis by fracturing into rival “clubs” of small and large or debt-restructuring and creditor nation-states.  But the European nations, especially those currently participating in the Eurozone, have untapped capacities for growth:

  • Educated youth
  • Underemployed female laborers
  • Outstanding higher educational institutions
  • Pent-up small- and medium-enterprise markets
  • Potential for growth in the service sector labor market
  • Room for more tightly integrating and rationalizing the region’s energy market.

Those interested in further detail and analysis are invited to visit the work and productivity at:

The Europe Center, at Stanford’s Freeman Spogli Institute for International Studies: http://tec.fsi.stanford.edu

Chatham House, at the Royal Institute for International Studies: http://www.chathamhouse.org/

 

Speaker bio:

Robin Niblett became the Director of Chatham House (the Royal Institute of International
Affairs) in January 2007. Before joining Chatham House, from 2001 to 2006, Dr. Niblett
was the Executive Vice President and Chief Operating Officer of Washington based
Center for Strategic & International Studies (CSIS). During his last two years at CSIS, he
also served as Director of the CSIS Europe Program and its Initiative for a Renewed
Transatlantic Partnership.

Most recently Dr. Niblett is the author of the Chatham House Report Playing to its
Strengths: Rethinking the UK’s Role in a Changing World (Chatham House, 2010) and
Ready to Lead? Rethinking America’s Role in a Changed World (Chatham House,
2009), and editor and contributing author to America and a Changed World: A Question
of Leadership (Chatham House/Wiley-Blackwell, 2010). He is also the author or
contributor to a number of CSIS reports on transatlantic relations and is contributing
author and co-editor with William Wallace of the book Rethinking European Order
(Palgrave, 2001). Dr Niblett is a frequent panellist at conferences on transatlantic
relations. He has testified on a number of occasions to the House of Commons Defence
Select Committee and Foreign Affairs Committee as well as US Senate and House
Committees on European Affairs.

Dr Niblett is a Non-Executive Director of Fidelity European Values Investment Trust. He
is a Council member of the Overseas Development Institute, a member of the World
Economic Forum’s Global Agenda Council on Global Institutional Governance and the
Chairman of the World Economic Forum's Global Agenda Council on Europe.

He received his BA in Modern Languages and MPhil and DPhil from New College,
Oxford.

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Robin Niblett Director Speaker Chatham House, Royal Institute for International Affairs
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Abstract
Paul Kim will share his long journey that has been focused on devising, offering, and evaluating educational access to the underserved children in developing regions of the world. In shedding light on how these fortuitous events, this narrative account of educational progress and change shares the research outcomes of a variety of mobile technology-integration projects at the K-12 level including: (1) literacy development in Mexico, (2) mobile math learning in California and India, (3) executive functioning assessment in Palestine, and (4) mobile science learning in El Salvador and India. Each country and school visited has its own unique story or set of stories and outcomes that can guide future developments of mobile learning technology including educational games, e-books, and other applications.

Paul Kim is the Assistant Dean for Technology & CTO for Stanford University School of Education. He is one of researchers for Programmable Open Mobile Internet (POMI) http://pomi.stanford.edu. He has been conducting research with multidisciplinary approaches and teaching graduate courses on technology-enabled empowerment and entrepreneurship. He is also working with numerous international organizations in developing mobile empowerment solutions for extremely underserved communities in developing countries. In the higher education space, he advises investment bankers and technology ventures focused on e-learning, knowledge management, and mobile communication solutions. His due-diligence engagements include early-stage angel funding and also later-stage private equity-based investments for large education enterprises.

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Paul Kim Speaker Stanford University
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After 9/11, the administration of US President George W Bush initiated the era of the global war on terror. For many, this was a misguided response to terror attacks. But before the decade was over, US forces invaded two countries and are now fighting shadow wars in Yemen, Somalia, and Pakistan, while an air war continues in Libya. Pentagon commands cover the entire planet, and US military assistance programmes are active in almost every country.

 Wars reorder politics and values. They remake that which is taken to be true and right. They render the world unrecognisable from what it was when the balloon went up. That is why epochs of world history are so often marked off by the dates of wars. How should we understand the era of 9/11? In what historical timeline does it belong?

It is useful to begin by recalling some of what seemed true on September 10, 2001. The US enjoyed the unquestioned global supremacy of the "unipolar moment". The "end of history" beckoned, in which liberal democracy and free markets promised peace and prosperity everywhere for all time. The West and its international organisations managed the world, ultimately for the general good. Globalisation was bringing people closer together.

Today, each of these verities lies broken. The failure to understand the 1990s and the significance of the end of the Cold War has left us unable to understand what has been happening in the decade since 9/11.

Renewed global military commitments have hastened an inevitable US decline. The unrestrained power of finance capital is wrecking economies and societies across the Western world. Europe lies prostrate, bereft of anything approaching serious leadership, mired in the divisive politics of austerity and racist, anti-immigrant populism. The great international institutions have sat on the sidelines of the crises roiling the world. The communications technologies that were supposed to lead to mutual understanding instead assist revolts and terrorism, rioters and financial speculators, when they are not being used by states to spy on their own citizens, or by corporations to increase the number of consumer products people desire.

How is it that the received wisdom about the nature of world politics was so badly wrong? What did we fail to see and why?

The great conceit that blinds us is the idea that the powerful make history just as they please. We are particularly prone to this error when thinking about international politics. Assisted by opinion columnists and think tank gurus, we tend to view the world from the perspective of decision makers in the great powers. What should the West do about Libya? How should the US respond to state failure in Yemen or the Iranian bomb? What should the G-20 do about the debt crisis?


'Like cowboys at the rodeo'

In the domestic politics of our own countries, it is easy for us to see that politicians are like cowboys at the rodeo: hanging on for dear life before a force of nature tramples them underfoot. The "bull" that throws them could be a long-simmering social crisis, a downturn of the business cycle, or some series of events over which no one exercises control. The skill of the politician determines how long they can hang on, but we are left in little doubt as to where the real power lies.

We are forced to confront the underlying social structures, historical legacies, and economic relations that determine our fates. Human agency, too, has its say, but it is not only that of the great leaders that matter. Ordinary people and the social and political movements they create can drive events and force the "policymakers" to respond. But fate usually works against human purposes. Rarely do either the powerful or those who resist them achieve quite what they intended.

A wonderful example of the impoverished vocabulary with which we think about international politics is the idea that "Reagan won the Cold War". The vast apparatus that is a modern state is reduced to its leader - "Thatcher", "Gorbachev". Agency, the power to shape events, rests firmly in the hands of this leader, who is located in the global North. A range of violent struggles, fought almost entirely in the global South, are subsumed under one term which denies there was even a war at all. Most of all, a tidy end - 1989 - is imagined in which, needless to say, the good guys won.

Epoch-defining dates like 1989 or 9/11 invoke various imagined histories and geographies. But too often the dates with which we order world politics are curiously Eurocentric. It is European exploration, the French revolution, a Congress in Vienna, and German invasions, for example, which mark out the globe's historical eras: 1492, 1789, 1815, 1914, 1939.

We are thus singularly unable to grasp the global histories and social relations that delivered us to 9/11. Within the conventional terms of analysis of international relations, it is almost impossible to see the great social, political and economic struggles between the global North and South that have driven modern world politics. European imperialism and the prodigious efforts to incorporate ever more peoples and places, ever more domains of life, into the capitalist world system lie at the origins of these global histories.

It is crucial to underscore that imperialism, capitalism and the modern world they together did not simply emanate from Europe. They were joint productions with the non-European world, albeit amid unequal power relations. Imperialism requires collaborators, while capital needs labour. The first factories were not built in England, but in the Caribbean, producing sugar with African slaves.

The World Wars gutted European imperial power and unleashed struggles for independence across the global South, led almost everywhere by the anti-imperialist left. For over forty years revolutionaries and insurgents, death squads and soldiers, carried on a deadly combat.

 

The fall of the left

The global significance of 1989, broadly speaking, was the defeat in both the North and the South of the political left, of those political movements that sought to replace, contain, or redirect the expansive energies of capital in accordance with humane values.

During the Cold War, Western powers had to maintain social welfare systems at home lest communism begin to look attractive. The Soviets, meanwhile, tried and failed to demonstrate that they too could produce washing machines, refrigerators and other consumer items. With the collapse of the USSR, neoliberalism was unleashed and could begin in earnest to do away with welfare states in the West. "Shock therapy" was delivered to the former Soviet bloc countries, while the debt crisis was used to control many economies in the global South. No longer did the West have to secure Third World allies with lavish aid.

The defeat of the left produced two outcomes which have defined the last twenty years and will continue to make history over the next twenty.

The end of the Cold War did not mean the end of the dire social consequences of unrestrained capitalism. The grievances, the injustices, the poverty, the anger, the continued reduction of everything human to the bottom line, to something that can be bought or sold, all this remained, even intensified. But now it was not the left that would make political lemonade out of these lemons, but the right; not communists, but religious fundamentalists, both Christian and Islamic. This is where the Tea Party belongs, feeding on the misdirected resentments of those devastated by unregulated capitalism.

The second outcome of 1989 is a dramatic increase in the political power of capital. Across the Western world, but most especially in the US, politicians are in hock to Big Money, while corporate media fundamentally shapes political debate.


Blinkered worldview

The problem with this, as Karl Marx would have told us, is that while capitalists know what is in the interest of their specific business, they are unable to cooperate for the good of the system as a whole. To maintain a capitalist society of a kind anyone would want to live in requires tremendous public investment and infrastructure; a neutral, professional and active civil service; and a strong framework of effective, lawful regulation.

Few capitalists want to pay taxes for all this, or subject their industries to significant regulation. Give capitalists as a class too much political power, and they will enfeeble government with their special interests, lobbyists, and kept politicians. The consequence is the drama currently on display: the self-destruction of the West and its economies. It is plainly obvious that Western societies are in dire need of modernisation, investment, and strategies for growth and employment. But the political forces that might fight for these have long since been vanquished. Anguished experts like Paul Krugman are left accurately to foretell a doom that the political systems of the West willfully do nothing to avoid.

It is this self-inflicted crisis that drives the timing of the scale-down of the global war on terror currently underway. After all, nation-building at home or abroad requires taxes. Rather than occupying countries in a "forward strategy for freedom", as Bush termed the invasion of Iraq, the war on terror will transform into the police, spy and special operations war Western liberals had originally called for in 2001.

Unifying the eras of the Cold War, the 1990s, and the decade following 9/11, are reinvigorated efforts to control the politics, economies and populations of the global South in the wake of the collapse of formal empire in 1945. Wars of tremendous folly and human cost have marked this entire period, in Korea, Vietnam, Algeria, Mozambique, and across Central and Latin America, among others. Bush's travesties in Iraq and Afghanistan will likely bring this series to an historical close. The tentative approach to Libya is a transition to a future of reduced Western ambition in the global South.

The retreat of the West from extensive and effective political and military efforts to control the global South - a history which began in the 16th century - rings the death knell of Western world power. The decade since 9/11 is the penultimate chapter in this history.

 

Tarak Barkawi is a senior lecturer in War Studies at the Centre of International Studies in the University of Cambridge. He also authored the book Globalization and War (Rowman and Littlefield). He has held fellowships at the Olin Institute for Strategic Studies, Harvard University; the Department of War Studies, King’s College London; the Center for International Security and Cooperation, Stanford University; and the Mershon Center for International Security Studies, Ohio State University. 

The views expressed in this article are the author's own and do not necessarily reflect Al Jazeera's editorial policy. 

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